UBS ramps up retail funds capacity

UBS Global Asset Managementhas closed its Australian equities book to new institutional mandates, opting to use its remaining funds under management (FUM) capacity to source managed fund inflows with the aim of growing its retail FUM by $4 billion over the next few years.

“We have recently moved to effectively close off our Australian equity capability to institutional clients and are using our remaining capacity to allow existing clients to top up their mandates and for the growth of the managed funds side of the business,” UBS chief executive officer John Larum says.

He says while the group has $6 billion in total FUM, it has no definitive figure for capping funds and will assess the situation as funds reach the $10 billion mark.

“As the funds approach about $10 billion in total, we may need to restrict more broadly but that will depend on the nature of the market at the time,” he says.

Currently, UBS has $1.5 billion in retail funds.

“We’re listed on most of the major wrap platforms and are broadening the range of funds on those platforms,” he says.

On the issue of increased range, Larum says the group plans to launch a new small cap fund — the UBS Emerging Companies Fund — within the next few months.

“We believe this fund will be supported primarily by the independent financial adviser market and will leverage off our existing capabilities across the entire equities team, and we have hired another investment person to meet the capacity,” he says.

At the end of 2001, UBS had just over $1 billion in funds, which grew to $4.5 billion 12 months later.

“We have had rapid growth in our Australian equities business over the last few years though we still believe we have plenty of available capacity to meet the growth of the managed fund market,” Larum says.